Create a Tax Risk – Open Yourself Up To Examination

Michael Lodge

By Michael Lodge

It is amazing to me when taxpayers are willing to risk their tax returns by over exaggerating their tax returns, and been doing it for years, and when caught they forget all about it and it is someone else’s fault. When you as a taxpayer enter into and agree to a tax risk and you signed on the tax return that under perjury that the tax return was correct you are now open to further examination. And if you have been doing it for years you are responsible as a taxpayer. You knew what you had been doing was wrong. You as a taxpayer are responsible for what you signed, especially when there is a consistent pattern over the years. This goes for tax returns and other tax reporting documents (w-4 etc). I hear this story from clients all the time, they are hungry for a big refund or more money in their pocket, they forced a tax risk, but not willing to admit they have guilt.
We as a firm have to help these clients fix a mess, and it takes time to correct the mess, but it gets done. Be diligent in the preparation process of your tax returns, be honest with your accountant, don’t risk the legal side of taxation.